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                                                                    EXHIBIT 10.5

                                MARKET AXESS INC.
                          15 Broad Street, Suite 17/43E
                            New York, New York 10005

                                                     As of January 25, 2001

Mr. John Vande Woude
91 Cherrywood Drive
Somerset, New Jersey 08873

                             Re: Terms of Employment

Dear John:

                  The purpose of this letter is to confirm that Market Axess
Inc. (the "Company") has offered you a position as Director Applications
Development, subject to the terms of this letter (the "Letter Agreement"). Your
employment will commence on the closing date of the transaction contemplated by
the Agreement and Plan of Merger (the "Merger Agreement") between the Company,
Trading Edge, Inc. ("Edge") and such other entities listed in the Merger
Agreement (the "Commencement Date") and will continue until such employment is
terminated by you or the Company. Notwithstanding anything else herein, your
employment with the Company will be "at-will" and you and the Company retain the
right to terminate your employment hereunder at any time for any reason or no
reason or by mutual agreement. You will report to Rachel Moseley, Chief
Information Officer of the Company.

                  While you are employed by the Company, you will devote all of
your business time and efforts to the performance of your duties hereunder and
use your best efforts in such endeavors.

                  While you are employed by the Company, the Company will pay
you a base salary at the rate of not less than $225,000 per year, in accordance
with the usual payroll practices of the Company. If you are employed by the
Company at the end of the fourth, eighth and twelfth months following the
Commencement Date, you will receive a retention bonus in the amount of $25,000
on each such date. In the event you are employed by the Company through and on
December 31, 2001 you will receive a discretionary performance bonus for the
applicable year which is expected to range from $25,000 to $75,000, depending

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John Vande Woude

January 25, 2001

Page 2

on your performance. Any earned and accrued bonus will be paid to you when other
employee bonuses are paid.

                  On the Commencement Date, the Company will award you stock
options to purchase 10,000 shares of the Company's common stock (the "Stock
Options") in accordance with the terms of the Market Axess Inc. 2000 Stock
Incentive Plan. The exercise price of the Stock Options shall be the fair market
value of the Company's common stock on the date of grant. The Stock Options
shall vest over a two (2) year period as follows: fifty percent (50%) of the
Stock Options shall vest on the one (1) year anniversary of the Commencement
Date and fifty percent (50%) of the Stock Options shall vest on the two (2) year
anniversary of the Commencement Date, provided you are employed by the Company
on each applicable vesting date.

                  It is expected that you will continue to participate in the
Trading Edge, Inc. benefit plans and programs for three (3) to six (6) months
after the Commencement Date. Thereafter, you will be entitled to participate, to
the extent eligible thereunder, in all Company benefit plans and programs, in
accordance with the terms thereof in effect from time to time, as are provided
by the Company to other employees of a comparable level of employment.

                  Upon presentation of appropriate documentation, you will be
reimbursed by the Company for reasonable business expenses, in accordance with
Company policies, in connection with the performance of your duties hereunder.

                  In the event your employment with the Company pursuant to this
Letter Agreement is terminated other than (x) by you voluntarily, (y) as the
result of your death, or (z) by the Company as the result of (A) your willful
misconduct in the performance of your duties under this Letter Agreement, (B)
gross negligence in the performance of your duties under this Letter Agreement
which has a material adverse effect on the business or assets of the Company or
its affiliates, (C) your conviction of, or plea of guilty or nolo contendere to,
a crime relating to the Company or any affiliate or any felony or (D) your
consistent and habitual failure to perform your duties (a "Disqualifying
Event"), and subject to your execution of a waiver and general release
substantially in the form which has been provided to other employees of the
Company, the Company will (i) continue to pay you your base salary for a period
of six (6) months following the date of such termination of employment, at such
times as base salary is paid to employees of the Company, but off the employee
payroll, and (ii) continue health care coverage under the Company's health care
plan in accordance with its terms and, pay your employee health care premium
contributions for a period of no more than six (6) months.

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John Vande Woude

January 25, 2001

Page 3

After such period you can elect health care continuation coverage under COBRA,
the details of which will be provided to you when you qualify. You will be under
no obligation to seek other employment and there will be no offset against any
amounts owing to you under this paragraph on account of any remuneration
attributable to any subsequent employment that you may obtain.

                  Upon termination of your employment for any reason, the
Company will have no obligations under this Letter Agreement other than: (i) as
provided above and (ii) to pay you: (x) any base salary that you have earned
and/or bonus you have earned (by remaining employed on and through December 31),
but remains unpaid; (y) any unreimbursed business expenses otherwise
reimbursable in accordance with the Company's policies as in effect from time to
time and (z) benefits in accordance with the terms of the applicable plans and
programs of the Company.

                  You will be required to execute a confidential information,
intellectual property, and noncompetition agreement (the "Noncompetition
Agreement"), substantially identical to that which the Company requires of other
employees of the Company, simultaneously with, or prior to the Commencement
Date.

                  You represent that your execution and performance of this
Letter Agreement will not be in violation of any other agreement to which you
are a party. Notwithstanding anything else herein, this Letter Agreement is
personal to you and neither the Letter Agreement nor any rights hereunder may be
assigned by you. The Company may assign the Letter Agreement to any parent or
subsidiary or acquiror of all or substantially all of the assets of the Company.
This Letter Agreement shall inure to the benefit of and be binding upon the
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees, legatees and permitted assignees of the parties.

                  You agree that all disputes and controversies arising under or
in connection with this Letter Agreement or Noncompetition Agreement, other than
seeking injunctive or other equitable relief under the Noncompetition Agreement,
shall be settled by arbitration conducted before one (1) arbitrator sitting in
New York City, or such other location agreed to by you and the Company, in
accordance with the National Rules for the Resolution of Employment Disputes of
the American Arbitration Association then in effect. The determination of the
arbitrator shall be final and binding on you and the Company. Judgement may be
entered on the award of the arbitrator in any court having proper jurisdiction.
Each party shall bear their own expenses of such arbitration.

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John Vande Woude

January 25, 2001

Page 4

                  The Company may withhold from any and all amounts payable to
you such federal, state and local taxes as may be required to be withheld
pursuant to any applicable laws or regulations.

                  This Letter Agreement shall be governed by, and construed
under and in accordance with, the internal laws of the State of New York,
without reference to rules relating to conflicts of laws.

                  This Letter Agreement and the agreements referenced herein
contain the entire agreement of the parties relating to the subject matter
hereof, and supersede in their entirety any and all prior agreements,
understandings or representations relating to the subject matter hereof,
including, without limitation, any agreements between you and Edge. No
modifications of this Letter Agreement will be valid unless made in writing and
signed by the parties hereto.

                                             Very truly yours,
                                             MARKET AXESS INC.

                                             By       /s/ Richard McVey
                                                --------------------------------
                                                Name: Richard McVey
                                                Title: Chief Executive Officer

Accepted and Agreed:

 /s/ John Vande Woude
____________________________

John Vande Woude